Since foreign companies are not subject to GAAP or CAS, do you still require an accounting system adequacy audit in order to issue a cost-reimbursement to a foreign vendor?
Foreign companies are in fact subject to CAS 401 (Consistency in Estimating, Accumulating and Reporting Costs) and CAS 402 (Consistency in Allocating Costs Incurred for the Same Purpose). Please see Figure 8-1-1 (CAS Coverage and Disclosure Statement Determination) on page 810 in Chapter 8
of the DCAA Contract Audit Manual. As a result, accounting system audit requirements will apply.